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Lenders warn of risk associated with farm sector repayment moratorium

A deterioration in borrowers' credit risk classification resulting from a government-mandated repayment moratorium for drought-hit farmers could harm clients' creditworthiness in future, presenting significant risk, the Hungarian Banking Association said in a statement issued on Tuesday.

The association noted that farmers will need further, significant bank credit to maintain the pace of development amid extreme weather conditions. The banking sector is prepared to offer “solutions that conform to the market”, it said.

The association urged agriculture sector borrowers impacted by the drought to find “appropriate financial solutions” together with their banks.

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